10.1(b)
CHANGE OF CONTROL AGREEMENT
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AGREEMENT made at Chicago, Illinois, on September 2, 1997, by and between
UNR Industries, Inc., (the "Company") and Xxxxx XxXxxxx, (the "Executive").
Recitals
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A. The Executive is currently employed by the Company as Chief Financial
Officer UNR Xxxx.
B. The Executive and the Company agree that it is desirable that the
Company provide greater employment security to the Executive, and, to
that end, the parties hereby enter into this Agreement.
In consideration of the mutual agreements herein set forth and for good and
valuable consideration, receipt of which is hereby acknowledged the parties
agree as follows:
1. Term of Agreement. Subject to the
provisions of paragraphs 2 and 3 of this Agreement, the term of this Agreement
shall be for a three year term (the "Three-Year Term") commencing on the date
hereof.
2. Definitions. For purposes of this
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Agreement, the following definitions apply:
(a) "Cause" shall mean (i) an act or acts of personal dishonesty by
Executive which results in personal enrichment of Executive at the expense of
the Company, (ii) violation by Executive of Executive's obligations under
paragraphs 5 or 6 of this Agreement which are willful on the Executive's part
and which are not remedied to the reasonable satisfaction of the Company in a
reasonable period of time after receipt of written notice from the Company, or
(iii) the conviction of the Executive of a felony. Any termination of this
Agreement for Cause shall be communicated by the Company to the Executive in a
notice of termination which shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of this Agreement.
(b) "Change of Control" shall mean the occurrence of any of the following
events:
(i) The "acquisition" after the date hereof by any "Person" (as such
term is defined below) of "Beneficial Ownership" (within the meaning of Rule
13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the
"1934 Act"), as in effect on the date hereof) of any securities of the Company
which generally entitles the holder thereof to vote for the election of
directors of the Company (the "Voting Securities") which, when added to the
Voting Securities then "Beneficially Owned" by such Person, would result in such
Person "Beneficially Owning" 50% or more (the "Requisite Percentage") of the
combined voting power of the Company's then outstanding Voting Securities;
provided, however, that for purposes of this paragraph (a), a Person shall not
be deemed to have made an acquisition of Voting Securities if such deemed to
have made an acquisition of Voting Securities if such Person: (i) acquires
Voting Securities as a result of a stock split, stock dividend or other
corporate restructuring in
which all securityholders of the class of such Voting
Securities are treated on a pro rata basis; (ii) acquires the Voting Securities
directly from the Company; (iii) becomes the Beneficial Owner of more than the
Requisite Percentage of Voting Securities solely as a result of the acquisition
of Voting Securities by the Company which, by reducing the number of Voting
Securities outstanding, increases the proportional number of shares Beneficially
Owned by such Person; (iv) is the Company or any corporation or other Person of
which a majority of its voting power or its equity securities or equity interest
is owned directly or indirectly by the Company (a "Subsidiary", (v) acquires
Voting Securities in connection with a "on-Control Transaction" (as defined in
paragraph (iii) below) or (vi) acquires Voting Securities upon the exercise or
conversion of Voting Securities of another class which does not increase the
percentage of Voting Securities Beneficially Owned by such Person; and provided
further that the UNR Asbestos Disease Claims Trust (the "Trust") may acquire the
Beneficial Ownership of additional Voting Securities to the extent that
immediately prior to such acquisition the Trust Beneficially Owned at least 50%
of the outstanding Voting Securities; or
(ii) The individuals who, as of the date of this Agreement, are
members of the Board (the "Incumbent Board"), cease for any reason to constitute
at least two thirds of the Board; provided, however, that if either the election
of any new director or the nomination for election of any new director by the
Company's stockholders was approved by (i) a vote of at least two-thirds of the
Incumbent Board or (ii) the Trust at such time as the Trust Beneficially Owns at
least 50% of the Voting Securities, such new director shall be considered as a
member of the Incumbent Board; provided further, however, that no individual
shall be considered a member of the Incumbent Board if such individual initially
assumed office as a result of either an actual or threatened "Election Contest"
(as described in Rule 14a-11 promulgated under the 1934 Act, as in effect on the
date hereof) or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board of Directors (a "Proxy
Contest"), including by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or
(iii) Approval by securityholders of the Company
of:
(a) A merger, consolidation or reorganization involving the
Company (a "Business Combination"), unless
(i) the securityholders of the Company, immediately before the
Business Combination, own, directly or indirectly immediately following the
Business Combination, at least 75% of the combined voting power for the election
of directors generally of the outstanding securities of the corporation
resulting from the Business Combination (the "Surviving Corporation") in
substantially the same proportion as their ownership of the Voting Securities
immediately before the Business Combination, and
(ii) the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing for the Business
Combination constitute at least two-thirds of the members of the Board of
Directors of the Surviving Corporation, and
(iii) no Person (other than the Company or any
Subsidiary, a trustee or other fiduciary holding securities under one or more
employee benefit plans or arrangements (or any trust forming a part thereof
maintained by the Company, the Surviving Corporation or any Subsidiary, or any
Person who, immediately prior to the Business Combination, had Beneficial
Ownership of the Requisite Percentage of the then outstanding Voting Securities)
upon consummation of the Business Combination is the Beneficial Owner of the
Requisite Percentage of the combined voting power for the election of directors
generally of the Surviving Corporation's then outstanding securities (a
transaction described in clauses (i) through (iii) shall be referred to as a
"Non-Control Transaction");
(b) A complete liquidation or dissolution of the Company; or
(c) An agreement for the sale or other disposition of all or
substantially all of the assets of the Company to any Person (other than a
transfer to a Subsidiary).
If any of the foregoing transactions are approved by securityhodlders and
not consummated within thirty (30) days after such approval is obtained (or such
longer period as may be determined by the then members of the Incumbent Board),
then the "Change of Control" shall be deemed void ab initio.
Voting Securities acquired by a Person that is not deemed to
constitute an "acquisition" of such Voting Securities by such Person by reason
or either of the provisos to paragraph (i) above shall nevertheless be deemed to
be Beneficially Owned by such person for purposes of determining whether the
"acquisition" of any additional Voting Securities by such Person (which
subsequent and, therefore, is considered to be an "acquisition" of Voting
Securities for purposes of paragraph (i)) would result in such Person exceeding
the Requisite Percentage of Voting Securities. The term "Person shall mean any
individual, firm corporation, partnership, joint venture, association, trust or
other entity as well as any "Affiliate" or "Associate" thereof (as such terms
are defined in the 1934 Act).
Notwithstanding the foregoing, a Change of Control shall not be deemed to
occur solely because the Requisite Percentage of the ten outstanding Voting
Securities is Beneficially Owned by (i) a trustee or other fiduciary holding
securities under one or more employee benefit plans or arrangements (or any
trust forming a part thereof) maintained by the Company or any Subsidiary or
(ii) any corporation which, immediately prior to its acquisition of such
interest, is owned directly or indirectly by the stockholders of the Company in
the same proportion as their ownership of stock in the Company immediately prior
to such acquisition. Furthermore, if the Executive's employment is terminated
and the Executive reasonable demonstrates that such termination (i) was at the
request of a third party who has indicated an intention or take steps reasonable
calculated to effect a Change of Control and who effectuates a Change of Control
or (ii) otherwise occurred in connection with, or in anticipation of, a Change
of Control which actually occurs, then for all purposes hereof, a Change of
Control shall be deemed to have occurred and the date of a Change of Control
with respect to the employment shall mean the date immediately prior to the
termination date.
(c) A resignation for "Good Reason" shall mean the resignation of the
Executive from employment by the Company after (i) a material reduction or
adverse alteration in the nature of the Executive's position, responsibilities
or authorities, (ii) the Executive becoming the holder of a lesser office or
title than that held by him immediately prior to such change, (iii) any material
reduction of the Executive's compensation or benefits, (iv) the relocation of
the Executive's job more than thirty miles from his present location or (v) any
other material adverse change to the terms and conditions of the Executive's
employment or benefits, provided that, if the Executive shall consent in writing
to any event described in clauses (i) through (v) of this sentence, the
Executive'' subsequent resignation shall not be treated as a resignation for
Good Reason, unless a subsequent event described in such clauses to which
Executive did not consent occurs.
(d) "Permanent Disability" shall mean any physical or mental disability
which shall have rendered Executive unable to perform his duties hereunder for
120 consecutive days, or which, in the opinion of a licensed physician
reasonable satisfactory to the Company, is likely to render Executive unable to
perform his duties hereunder for such period.
(e) "Retirement" shall mean a termination of the Executive's employment
other than for Cause on or after the Executive's attainment of age 65.
3. Severance Benefit
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If, during the term of this Agreement, (a) a Change of Control occurs, and
(b) within a two year period from the date of such Change of Control, either (i)
the Executive's employment with the Company and its subsidiaries is terminated
by the Company other than for Cause or on account of the Executive's death,
Permanent Disability or Retirement, or (ii) the Executive resigns for good
Reason, then the Company shall pay to the Executive a Severance Payment in an
amount equal to one and one-third (1-1/3) times the Executive's annual salary
for the year in which termination occurs. The Severance Payment shall be
payable in a single lump sum which shall be paid within thirty (30) days of the
termination of employment or resignation.
In addition to the Severance Payment, the Company shall provide health,
disability and life insurance in accordance with the plans maintained by the
Company for executives for a period of one (1) year from the date of termination
of the Executive's employment, provided that health, disability and life
insurance benefits shall cease if Executive becomes employed during such period
and receives similar benefits in connection with such employment.
Notwithstanding the foregoing, if there shall be a sale or disposition of
all or substantially all the assets of the Company and the Executive shall be
offered employment (at substantially the same level of Executive's authority,
responsibility, compensation and benefits with the Company before such sale),
with the purchaser or any of its affiliates ("Buyer") following such sale or
disposition, then the Executive shall not be entitled to a Severance Payment as
provided above. In that event, however, the Executive shall be entitled to a
Severance Payment if, within a twelve (12) month period, either (1) the
Executive's employment with the Buyer shall be terminated by the Buyer other
than for Cause or on account of the Executive's death, Permanent Disability or
Retirement, or 92) the Executive shall resign from the Buyer for Good Reason.
Such Severance Payment shall be computed on the basis of the Executive's salary
at the Company in the year in
which Executive was last employed by the Company.
For purposes of this paragraph, the time of a termination of employment or
resignation and the definitions of "Permanent Disability", "Retirement",
resignation for "Good Reason" and "Cause" shall be construed with reference to
the Buyer instead of with reference to the Company.
4. No Reduction or Mitigation. The amounts
payable pursuant to paragraph 3 of this Agreement shall be paid without
reduction, other than as provided in said paragraph, regarding less of any
amounts of salary, compensation or other amounts which the Executive could have
obtained upon seeking other employment; provided that the Company shall be
permitted to make all such payments net of any legally required tax
withholdings.
5. Non-competition. The Executive agrees that
during his employment and for a period of one (1) year after the termination of
his employment for any reason, he shall not enter into or engage in or be
connected with, or engage to work for an individual, firm or corporation which
is engaged in or connected with, any business which is then in substantial
competition with the Company in the United States. The provisions of the last
preceding sentence shall not apply to the ownership of less than ten percent
(10%) of the shares of any corporation listed on any recognized exchange or
traded over-the-counter. The provisions of this paragraph shall survive a
termination of this Agreement.
6. Non-Disclosure. The Executive agrees not to
disclose either during the period of his employment or at any time thereafter to
any person, firm, or corporation any information concerning the business or
affairs of the Company which he may have acquired in the course of, or as
incident to, his employment with the Company for his own benefit or to the
detriment or intended detriment of the Company. The provisions of this
paragraph shall survive a termination of this Agreement.
7. Binding Effect; Assignment. This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
the Executive's heirs and legal representatives and the Company's successors and
assigns. This Agreement is assignable by the Company to any corporate or other
entity which acquires, directly or indirectly, by merger, consolidation,
purchase or otherwise, all or substantially all of the assets of the Company.
Upon any such assignment, and the assumption by the assignee of all obligations
hereunder, the Company shall be released from all liability hereunder. This
Agreement shall not be assignable by the Executive.
8. Nonalienation of Benefits. Benefits payable
under this Agreement shall not be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, charge,
garnishment, execution or levy of any kind, either voluntary or involuntary,
prior to actually being received by the Executive; and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, charge, garnish,
execute on, levy or otherwise dispose of any right to benefits payable
hereunder, shall be void.
9. Severability. If all or any part of this
Agreement is declared by any court or governmental authority to be unlawful or
invalid, such unlawfulness or invalidity shall not serve to invalidate any
portion of this Agreement not declared to be unlawful or invalid. Any paragraph
or part of a paragraph so declared to be unlawful or invalid shall, if possible,
be
construed in a manner which will give effect to the terms of such paragraph
or part of a paragraph to the fullest extent possible while remaining lawful and
valid.
10. Entire Agreement; Amendment; Waiver. This
Agreement represents the entire agreement between the parties hereto with
respect to the subject matter hereof, and supersedes all prior or
contemporaneous oral or written negotiations, understandings and agreements
between the parties hereto. This Agreement shall not be altered, amended or
modified except by written instrument executed by the Company and Executive. A
waiver of any term, covenant, agreement or condition contained in this Agreement
shall not be deemed a waiver of any other tem, covenant, agreement or condition,
and any waiver of any default in any such term, covenant, agreement or condition
shall not be deemed a waiver of any later default thereof or of any other term,
covenant, agreement or condition.
11. Notices. all notices required by this
Agreement shall be in writing and delivered by hand or by first class registered
or certified mail, postage prepaid.
12. Legal Fees and Expenses. In the event that
Executive undertakes legal action against the Company to enforce its rights
under the terms of this Agreement and judgment is entered against the Company,
the Company shall pay legal fees and expenses incurred by the Executive.
13. Applicable Law. The provisions of this
Agreement shall be interpreted and construed in accordance with the laws of the
State of Illinois, without regard to its choice of law principles.
14. Extension. This Agreement shall be
automatically extended for additional Three-Year Terms if the Company does not
give Executive written notice of termination of this Agreement on or before 120
days prior to the expiration of the Three Year Term then in effect.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
UNR Industries, Inc.
By: Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx, President
and CEO
EXECUTIVE: Xxxxx X. XxXxxxx
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